It's reported that North Korea launched another ballistic missile test today, the 9th this year. It's also the third week in a row that missiles were launched. Japanese Prime Minister Shinzo Abe responded and said that "as we agreed at the recent G7, the issue of North Korea is a top priority for the international community." And, "working with the United States, we will take specific action to deter North Korea." Nonetheless, reactions in the forex markets are muted as traders were getting bored with such news. In addition, holidays in China, Taiwan, UK and US also contributes to the lack of volatility. Meanwhile, the Korean KOSPI closed down -0.1% after failing to hold on to initial gains.
German Merkel: Europeans to take destiny into own hands
German Chancellor Angela Merkel was clearly dissatisfied with the G7 summit. She warned on Sunday that "the times in which we can fully count on others are somewhat over, as I have experienced in the past few days". And "we Europeans must really take our destiny into our own hands." While there should be "friendly relationship" with US, UK and Russia, "we have to fight for our own future ourselves". Merkel also said earlier that the discussion on climate change with US was "very difficult, not to say very unsatisfactory". And, "there we have a situation of six against one, meaning there is still no sign of whether the US will remain in the Paris accord or not."
San Francisco Fed Williams: Three rate hikes makes sense
San Francisco Fed president John Williams said that as Fed normalizes its policies, it wants the markets to stay cool with it. He emphasized that "the last thing we want to do is to fuel unnecessary or avoidable volatility or disruption", domestically or internationally. He reiterated that "three rate hikes" this year "makes sense" and "nothing has pushed me away from that". And Fed should "continue this gradual process of policy normalization in interest rates.
Looking ahead...
The calendar is rather busy this week in spite of a holiday on Monday. Dollar will look into ISM manufacturing and non-farm payroll. Euro will look into CPI. Meanwhile, Aussie will look into retail sales and China PMIs. Here are some highlights for the week ahead
- Tuesday: Japan household spending, unemployment rate, retail sales; Australia building approvals; Germany import prices, CPI; France GDP; Swiss KOF leading indicator; Canada current account, IPPI, RMPI; US personal income and spending, consumer confidence
- Wednesday: UK Gfk consumer sentiment M4 money supply, mortgage approvals. China PMIs; Japan housing starts; Swiss UBS consumption indicator; German retail sales, unemployment; Eurozone CPI, unemployment; Canada GDP; US pending homes sales, Chicago PMI, Fed Beige Book
- Thursday: Australia retail sales; China Caixin PMI manufacturing; Swiss GDP, retail sales; Eurozone PMI manufacturing revision; UK PMI manufacturing; US ADP employment, non-farm productivity; ISM manufacturing
- Friday: Japan monetary base, consumer confidence; UK construction PMI; Eurozone PPI, Canada trade balance; US non-farm payroll, trade balance